Response to consultation on Guidelines on limits on exposures to shadow banking
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• That small positions below 0.25% of the capital of an entity would be out of scope and not included in the aggregate limit,
• The perimeter of SB would not include UCITS nor AIFs without substantial leverage nor VNAV MMFs.
More generally, we consider that individual limits should be sufficient to manage the risks and believe that aggregate limit will not be relevant because of the very large diversity of SB entities and activities. In our view there is not much sense in adding factoring with hedge funds and repos with a broker…
Though, the aggregate approach could apply as a fallback.
2. Do you agree with the approach the EBA has proposed for the purposes of establishing effective processes and control mechanisms? If not, please explain why and present possible alternatives.
NA3. Do you agree with the approach the EBA has proposed for the purposes of establishing appropriate oversight arrangements? If not, please explain why and present possible alternatives.
NA4.Do you agree with the approaches the EBA has proposed for the purposes of establishing aggregate and individual limits? If not, please explain why and present possible alternatives.
Amundi is concerned by the consequences of a possible poor calibration of an aggregate risk limit. This concern would be reduced if it were made clear :• That small positions below 0.25% of the capital of an entity would be out of scope and not included in the aggregate limit,
• The perimeter of SB would not include UCITS nor AIFs without substantial leverage nor VNAV MMFs.
More generally, we consider that individual limits should be sufficient to manage the risks and believe that aggregate limit will not be relevant because of the very large diversity of SB entities and activities. In our view there is not much sense in adding factoring with hedge funds and repos with a broker…
Though, the aggregate approach could apply as a fallback.